The tenants in this instance were told that they each had a licence rather than an assured shorthold tenancy and their deposits were not protected in a tenancy deposit scheme.
Sham licences can mislead residential occupiers about their rights by misinforming them about the type of occupational arrangement they have.
The tenants complained to their council when they could not get their deposits back. Trading Standards prosecuted the letting agency under the Consumer Protection from Unfair Trading Regulations 2008.
The letting agency pleaded guilty to two offences under the Regulations and to a further offence of using a letting agency association logo without authority. The letting agency was fined £11,000 for issuing two sham licences and a further £5,000 for using the logo. The agency was also ordered to pay £3,000 in compensation to the tenants.